I tried to answer your post with a link to the site, but it didn't work.

The school i would recommend is Algarve Surf Camp the same place the first person mentiones. They have a guest house in the center of Sagres and also have a Surf Shop in the center of Lagos. If you really wanted to stay in Lagos for its nightlife, they would pick you up from the surf shop for surf lessons.

I personally like Sagres more than Lagos. Sagres has some bars and restaurants and a discotech. In Lagos, you can't walk 5 feet without finding another bar. I would stay based in the Sagres surfcamp and spend a night or 2 in Lagos.